CANADA
Annual Report on Consumer Issues
1999
I. Federal Institutional Developments
General federal consumer policy responsibilities are centred in Industry Canada’s Office of Consumer Affairs. However, product safety is the responsibility of the Product Safety Bureau in the Health Protection Branch of Health Canada; marketing practices, enforcement and non-food packaging and labelling are the responsibility of Industry Canada’s Competition Bureau; and food labelling, packaging and advertising policies, regulations and compliance are the responsibility of the Canadian Food Inspection Agency.
II. Consumer Safety
Regulatory Activities
A number of consumer products regulations are under revision and updating . This includes: Consumer Chemical and Containers Regulations under the Hazardous Products Act (HPA); Liquid Coating Materials Regulations under HPA; and Cosmetic Regulations under the Food and Drugs Act.
Harmonisation and International Standards
Health Canada’s Environmental Health Directorate (EHD) leads Canada’s representation in international discussions of the UNCED, Agenda 21, Chapter 19 objective of a globally harmonised hazard classification and compatible communication system (labels and safety data sheets). As part of this initiative, EHD represents Canada at the Inter-Organization Programme for the Sound Management of Chemicals (IOMC) Co-ordinating Group for the Harmonisation of Chemical Classification Systems and at the OECD Advisory Group responsible for the health and environmental classification criteria.
Information Dissemination
The Product Safety Bureau, Health Canada, in collaboration with the Information and Education Programme of the Environmental Health Directorate continued to provide numerous information- and education-related activities. Several public education bulletins incorporating plain language were produced on product safety themes. For further information on this activity, please contact the Information and Education Programme at: +1-(613)-952-1014.
Transportation Safety
Transport Canada's Safety and Security Group is responsible for the development of regulations and national standards and for the implementation of monitoring, testing, inspection, research and development, and subsidy programmes, to contribute to safety and security in all modes of transport. Their objective is to protect life, health, the environment, and property. Current initiatives focusing on consumer safety include: an air bag deactivation campaign; videos on the safety of children and air bags; and public awareness campaigns on the reduction of impaired driving, on the proper use of child restraints in motor vehicles, and on the reduction of crossing and trespassing accidents on railway rights-of-way. The Group is also exploring possibilities to reduce incidents involving unruly airline passengers.
III. Protection of the Economic Interests of Consumers - Federal Initatives
Financial Issues
In June 1999, the government tabled a white paper, Reforming Canada’s Financial Services Sector, which announced, among other measures: the creation of a new financial services ombudsman for all federally regulated financial institutions; plain language initiatives for standard consumer financial contracts; mandatory notice provisions for the closure of bank branches; mandatory low cost chequing accounts; and a new financial consumer agency which would regulate existing and new consumer protection provisions in federal financial institution statutes, monitor voluntary codes made among financial institutions to protect consumers, and assume a broad consumer education and information role. The enabling legislation is expected in late spring 2000.
Electronic Commerce
OCA worked throughout 1999 with representatives of consumer and industry associations and federal and provincial governments, to develop the Principles for Consumer Protection in Electronic Commerce: A Canadian Framework. The principles were released in November 1999. OCA is now working with these stakeholders to implement the principles through harmonising consumer protection legislation, developing voluntary initiatives and educating consumers and merchants about electronic commerce. Internationally, OCA continues to work through the OECD Committee on Consumer Policy on methods for implementing the Guidelines for Consumer Protection in the Context of Electronic Commerce.
Contributions Programme
The Contributions Programme provides consumer organisations with the resources to undertake research in order to provide analysis to policy debates and contribute to the policy-making process. The programme also provides modest resources (maximum of CAD 50 000 per year) to projects designed to improve the financial self-sufficiency of consumer organisations. The Contributions Budget is currently set at CAD 1 million per annum. For 1999-2000, 22 organizations submitted 84 funding requests under the programme. Of these, nine organisations will be funded for 25 projects addressing such issues as: financial services (7), consumer credit (2), electronic commerce (2), energy deregulation (2), sustainable consumption (2), auto retailing (1), biotechnology (1), privacy (1), standards (1), and telecommunications (1).
Intergovernmental Co-operation
A meeting of federal-provincial-territorial consumer ministers was held in November 1999, marking renewed resolve among governments to co-operate in the following key areas: the development of consumer protection measures in electronic commerce, including legislative harmonisation, consumer education, certification of Web sites and dispute resolution; improved co-operative enforcement (particularly as it applies to collection agencies); and an examination of both market-based consumer dispute resolution and the growing phenomenon of an "alternative consumer credit market" which is currently providing small loans of short duration to consumers at high effective interest rates.
Privacy
The Personal Information Protection and Electronic Documents Act, based largely on the CSA Model Privacy Code, was considered in the House of Commons and the Senate in the fall of 1999, and was enacted in the spring of 2000.
Self-regulation and Voluntary Codes
OCA and Treasury Board re-printed a Guide for the Development and Use of Voluntary Codes. OCA also developed an online tool for evaluating the effectiveness of existing voluntary codes, and operated an online Voluntary Codes Research Forum, with over 150 members around the world, which provides government, private sector, academic and NGO representatives with updates on new voluntary initiatives and research (http://strategis.ic.gc.ca/SSG/ca00973e.html).
OCA assisted the Department of Foreign Affairs and International Trade in establishing a working group to discuss development of a voluntary code regarding worker human rights in the manufacture of apparel products. OCA also worked on furthering the role of consumers in the development of standards through the national and international standards system, sponsored feasibility studies on e-commerce consumer standards, and held a workshop to consider these studies (summaries available on line at: http://strategis.ic.gc.ca/oca).
Telecommunications
Canadians continue to feel the impact on telecommunications services of new technologies and a rapidly changing marketplace. A Senate Subcommittee on Communications was launched in early 2000 to examine and report on convergence and competition and the outcome for Canadian consumers. The study will be performed in three phases, reporting back in the fall and winter of 2000 and the spring of 2001. In May1999, the federal telecommunications regulator concluded that it would not regulate new media services on the Internet, having determined that the new media on the Internet are achieving the goals of the federal Broadcasting and Telecommunications Acts and are highly competitive and successful without regulation.
Biotechnology
OCA continues to focus on ensuring that consumer views on biotechnology are considered at a wide range of policy tables. In addition to OCA’s own contributions to policy making, this has involved: ensuring consumer representation on the Canadian Biotechnology Advisory Committee, an arm’s length committee of experts who will advise Ministers and engage Canadians in an open dialogue on biotechnology; working with a wide range of government, industry and consumer representatives to develop a voluntary standard for the labelling of genetically modified food; organising a workshop on public confidence and biotechnology which included consumer representatives and speakers; contributing to and enabling consumer representatives to contribute to pre-Codex discussions on labelling; and sponsoring consumer representation at the OECD Edinburgh Conference on genetically modified food.
Conformity Continuum
Legislative amendments, changing economic and business environments, expanded responsibilities, and financial and resource constraints have led to a review of the Competition Bureau’s approach to the enforcement and administration of its legislation. The Commissioner of Competition is responsible for the administration and enforcement of the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act and the Precious Metals Marking Act. To achieve conformity with the legislation, the Commissioner has adopted a conformity continuum approach, assuming that most businesses prefer to comply with the law than to become involved in enforcement proceedings. This allows the Bureau to choose between education, compliance and enforcement instruments for each situation.
Enforcement Activities
In September, 1999, an application for an interim order was filed with the Competition Tribunal to prevent Universal Payphone Systems Inc. from continuing to make misleading representations concerning its income potential for investors, the ease of commencing business and the costs of entry into the market. The order was granted under the Competition Act’s new civil misleading representation provisions, and in March 2000 a consent order required Universal to cease marketing its payphone business to consumers for ten years.
In December 1999, 85 criminal charges under the misleading advertising provisions of the Competition Act were laid against three telemarketing companies, their principal director, two managers and eleven individual telemarketers. The Bureau alleges that misrepresentations were made regarding the nature, value and quality of offered awards and that important additional conditions and restrictions required to collect the awards were not disclosed or were only partially disclosed to consumers at the time of the transaction.
On 7 October 1999, Cave Promotions Ltd. pleaded guilty to an offence under the misleading advertising provisions of the Competition Act, related to a mail scratch and win promotion where consumers were led to believe that they had won a significant prize and were directed to call a toll telephone line to claim the prize. On calling, many found that they had won no prize or a much less valuable prize and were billed CAD 20 or more for the call.
In March 1999, record fines of CAD 1 000 000 against American Family Publishers, Publishers Central and First Canadian Publishers, and CAD 100 000 against the companies’ president were imposed by the Quebec Superior Court. The Court also imposed a Prohibition Order to prevent repeat anti-competitive conduct. The charges related to deceptive telemarketing activities over a two-year period which led consumers to spend up to several thousand dollars for promotional products to receive valuable prizes, promised but never delivered. Seventeen companies and 18 individuals were charged with false and misleading advertising and in March 2000 many of these telemarketers received jail terms and orders to carry out community work. Other individuals and their personal corporations are still awaiting trial.
Internet Sweeps
In late 1999, Bureau staff commenced an Internet sweep of multi-level marketing sites to gauge the level of compliance with the Competition Act’s multi-level marketing provisions, particularly with regard to income representations. Operators of non-compliant sites have been sent educational e-mail messages outlining why their site may not comply with the law and are being provided with information on how to comply.
In February 2000, the Bureau participated in the global millennium Internet sweep, a multi-jurisdictional internet sweep co-ordinated by the US Federal Trade Commission, which targeted deceptive business opportunities. The Bureau’s team identified about 70 sites which raised concern and all have been notified. A follow-up monitoring of these sites will be conducted later in the summer to assess whether corrective action has taken place.
Improving our Frameworks of Co-operation: Canshare
Progress was made on a federal-provincial information sharing system, Canshare, which will facilitate the enforcement of provincial and federal legislation. The Canshare system is an Internet-based intelligence tool; it contains complaint information on misrepresentations and scams, inputted by federal and provincial member organisations, and has an e-mail feature for sending preventative alerts to members on illegal activities. It is linked to the US Federal Trade Commission’s Consumer Sentinel database. Participants recognise that information sharing, co-ordination and co-operation will result in a more effective resolution of mutual interests.
Packaging and Labelling
Textile and Apparel Goods. Under the NAFTA Subcommittee on Labelling of Textile and Apparel Goods, the Competition Bureau, other government departments and concerned industry and consumer representatives have been working to harmonise labelling requirements. The NAFTA countries are now in the final stages of development of new common care symbols which will provide more care information and better reflect modern cleaning methods. The Bureau has therefore asked the Canadian General Standards Board to undertake consultations to revise Canada’s care labelling standard and to review associated test methods and test criteria to ensure that they are appropriate for the current marketplace.
Environmental labelling. Since 1994, the Bureau has provided input to three ISO working groups to assist the development of labelling standards under the ISO 14000 environmental management series. These standards have now been published and the Bureau has assisted the Canadian Standards Association to adopt one of these standards (ISO 14021 - Self Declared Environmental Claims) as a National Standard of Canada. This standard reflects what will be accepted in most industrialised countries as the basic guidance on the use of environmental symbols such as the mobius loop and terms like "recyclable", "recycled", biodegradable, compostable, and substance-free claims. The widespread use and application of this standard will give consumers confidence that the environmental claims they see in advertising and labelling are accurate, reliable and verifiable.
Provincial/Territorial Activities
Under Canada's constitutional framework, responsibility for consumer protection is shared with provincial/territorial governments. Much of their legislation -- covering such issues as trade practices, consumer guarantees and warranties, and specific sectors, such as consumer credit reporting and collection agencies -- has been in place for a number of years. Each province and territory periodically amends its legislation to ensure that it meets the evolving needs of consumers, business and regulators.
Major legislative events in 1999 included the coming into force in Alberta of an ambitious consolidation of its consumer statutes into a single piece of legislation, the Fair Trading Act. This Act, along with its comprehensive set of accompanying regulations, offers a modernised, co-ordinated approach to consumer protection.
In other activities, a 1995 agreement among provinces and territories to harmonise direct sellers legislation came close to completion in 1999 with the implementation of harmonised legislation in British Columbia, Nova Scotia, Ontario and Northwest Territories. The legislation establishes a set of uniform contract provisions and a ten-day cancellation period for direct sales transactions. By the end of 1999, all jurisdictions had passed the legislation, although it was not yet proclaimed in force in Ontario or Nova Scotia.
Jurisdictions also worked throughout the year in preparing uniform cost of credit disclosure legislation, in force in Alberta (through the Fair Trading Act) and passed in the legislature (though not proclaimed) in Ontario.
British Columbia: Consumer Protection Act
Nova Scotia: Direct Sellers Regulation Act
Northwest Territories, Consumer Protection Act
For updates on Cost of Credit Disclosure harmonisation, see: http://strategis.ic.gc.ca/SSG/ca01086e.html / http://strategis.ic.gc.ca/SSGF/ca01086f.html (French)
IV. Information and Education
Information Networks
OCA’s Web site, Consumer Connection, provides rapid access to a broad range of consumer information. It contains interactive tools to reduce research time and customise information. In 1999-2000, information products will include: a mutual funds calculator which determines the impact of fees and commissions on investment fund returns; a second Annual Financial Service Charges Report; Privacy Town -- to help consumers identify with the concerns associated with privacy in their daily lives; a Fraud Quiz -- to help consumers determine their susceptibility to fraud; re-designed and updated Financial Service Charges and Credit Card Cost Calculators; and Consumer News -- which will provide current information on consumer related topics. Consumer Connection will also undergo a complete redesign to improve navigability and ease-of-use for consumers.
Canadian Consumer Information Gateway
In 1999 OCA, with more than 25 federal government departments and agencies, began to develop a portal to consumer information across government, to help consumers in their marketplace decisions. It will include a broad range of information, contacts and links at all levels on available consumer programmes, research initiatives, standards or regulations, codes of practice, protection and safety services, advisory services, and complaint mechanisms. The federal phase of the project is to be launched to the public in June 2000.
Publications
In November 1999, to increase protection for consumers shopping on line, Canadian governments, business and consumer associations published Principles of Consumer Protection for Electronic Commerce: A Canadian Framework. Two publications accompanied the Principles; one of these, entitled Shopping on the Internet: Get Informed was targeted to consumers, and the other, Your Internet Business: Earning Consumer Trust, was targeted to businesses. The Canadian Consumer Handbook was updated for the year 2000, and the Consumer Quarterly had a double edition looking at consumer affairs in Canada and internationally, while the spring 2000 issue will focus on the basics of electronic commerce. All these publications are available on line at: http://strategis.ic.gc.ca/oca.
V. Relations between Consumer Policy and Other Aspects of Government Policy
Much of government policy is focused on ensuring a fair and efficient marketplace, one which generates productivity gains for businesses and a higher standard of living for citizens. For those engaged in consumer policy in Canada, this focus entails: facilitating the provision of critical marketplace information for consumers; building consumers’ capacity to protect their own interest; ensuring that consumer concerns are considered at a broad range of policy tables; acting as a catalyst on emerging consumer policy issues; and protecting the consumer interest in the event of marketplace failure.
While other departments and agencies have regulatory and enforcement powers to assist them in this process, the Office of Consumer Affairs relies on: strategic use of information; promotion and development of policy instruments such as voluntary guidelines and codes; and co-operation with other government departments and provincial ministries, consumer organisations and business associations. The importance of consumer policy is beginning to achieve more recognition, as Canadian governments, like others, commit themselves to more civic consultations.
Latest update 25 January 2001